LONDON, (Reuters) -Rolls-Royce reported that it traded in line to expectations for the first four months, according to the engine manufacturer. This was due in part, it said, to a gradual return of flying and an increase in government investments in defense.

British aerospace company, British Aerospace reiterated its forecasts. The British company also set a medium term outlook for civil aerospace. According to the British company’s outlook, it anticipates that underlying revenue will grow at a low two-digit percentage compound growth rate (from 2021) and operating margin percentages in the upper single digits.

It anticipates trading cashflow exceeding operating profit comfortably.

Rolls has suffered a severe blow from the pandemic, as Rolls’ revenue was heavily tied to the hours that its engines were flown by airline customers.

Flying hours for its civil aero unit were up 42% compared to the previous year. Passenger demand is recovering in areas where COVID restrictions are less severe.

It stated that the products it supplied were maintained and delivered over many decades. This means they aren’t vulnerable to geopolitical changes. But it stated that the longer-term outlook for growth is supported by higher government spending.

Company is looking for replacement Chief Executive Warren East. The company also indicated that it works with suppliers to reduce disruption.

It stated that it had increased its inventory to mitigate the effects of volatility and added that long-term sourcing arrangements and hedge policies were in place to provide some protection.